VIVAnews - PT Hanjaya Mandala Sampoerna Tbk (HMSP) is planning to restructure its tobacco business in Malaysia.
The restructuring is aimed at a retrechment concerning the commitments from the Malaysian government to apply the free trade agreement (FTA) on January 1.
Hanjaya Mandala Sampoerna Corporate Secretary Suartini Harintho said on Tuesday, Jan 12, in a written statement that the company's operation in Malaysia is carried out by PT Sampoerna JL Sdn Bhd and PT Sampoerna Distribusi (Malaysia) Sdn Bhd.
"The two companies are the subsidiaries owned indirectly by the company," said Suartini.
Sampoerna Distribusi acquired a sublicense of trademark to produce and sell kretek cigarettes in the duty-free, duty-paid, and excise tax paid domestic markets.
The company has appointed Sampoerna JL as the contract manufacturer to produce the kretek cigarettes. Sampoerna JL was also appointed kretek cigarette producer for duty-free markets in Singapore, Brunei Darussalam, and Vanuatu.
He stated that the company intended to shift kretek cigarette supply from Sampoerna JL in Malaysia to a company in Indonesia due to the AFTA implementation.
The shift aims at taking benefits from the lower import duty. The supply shift will be applied to domestic markets and other markets outside Malaysia.
"Given the supply shift, the company is planning to shut down every Sampoerna JL's operation in Malaysia and set out a termination of employment," he said.
However, the company's plan depends on the approval from and or report to state agencies, related corporation, and third party.
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Translated by: Bonardo Maulana Wahono
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